For many years, China was the main source of illicit fentanyl. But in 2019 following intense diplomatic pressure from the US, the Chinese government

Chinese Businesses Fueling the Fentanyl Epidemic Receive Tens of Millions in Crypto Payments

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2023-05-25 02:00:04

For many years, China was the main source of illicit fentanyl. But in 2019 following intense diplomatic pressure from the US, the Chinese government regulated the drug – effectively banning its export.

However, far from stemming the tide, illicit fentanyl imports into the US have soared. That’s because Mexican drug cartels have stepped in to fill the void and seize the market – manufacturing their own fentanyl using precursors (chemical ingredients) imported from China.  The US government has placed increasing emphasis on disrupting the financial activity of fentanyl traffickers and their supply networks. In a fact sheet published on April 11th, the White House indicated that it intends to “expand its efforts to disrupt the illicit financial activities that fund these criminals by increasing accountability measures, including financial sanctions”.  Three days later, on April 14th, the US Department of the Treasury sanctioned several individuals and businesses in China for supplying precursor chemicals to drug cartels in Mexico for the production of fentanyl intended for the US market. The sanctions also listed cryptocurrency wallets used by these businesses to receive payments.  The Elliptic research team identified more than 90 China-based chemical companies that were willing to supply fentanyl precursors, and that are offering cryptocurrency as a payment method.

Our researchers received offers to supply large quantities of one particular fentanyl precursor. This chemical is not used in the manufacture of any other products, and is a controlled substance in most countries. However, it remains unregulated in China. 

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